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The housing prices in Stockholm stood still in the month of November, after having increased with 20 percent over the past year. The rapid increase of housing prices in Sweden, and especially in the big cities of Stockholm, Gothenburg and Malmö, can be a sign of a housing bubble warns experts.

The Swedish National Bank, the Riksbank, has currently set it's interest rate at a negative. This means that borrowing Money is increadibly cheap. It's possible to get mortgages of less than 1,5% per year. Interest rates are further tax deductable with 30% up to 100 000 kronor, making it even cheaper. This - together with tax Cuts on real estate and tax breaks for Construction and improvements of dwellings, had make the housing prices in the Scandinavian country to sky rocket. You can today borrow 4 times more Money for the same cost, than before the Financial crisis.

Apart from the cheap Money, production of housing has not kept up with the demand. Even though the number of newly built apartments and houses in Stockholm is the highest in a long time, it's still to few to keep up with the population growth. Stockholm is, together with Oslo and Copenhagen, the fastest growing Capitals in Europe.

Many experts have been warning for a housing bubble, while none of the governmental authorities have managed to take any action against what many beleive is a housing bubble. The current center-left government refuses to take any actions, and blames the previous center-right government for not acting. The Riksbank says it's not their responsability, and the Financial Inspection claims it's not their either. However most agree that the price increases are not sustainable, and that there most probably is a housing bubble.

Last time Sweden has a housing bubble that burst, in the early 1990:s, housing prices in Stockholm Went down with 40% and created a major recession. Now many fear that the lack of increase of housing prices in November, is the first signs of the bubble is starting to burst.

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Stockholm's housing prices have almonst ten folded over the past 20 years.

Stockholm's apartment prices are 8 - 10 times higher than they were after the real estate crisis in the early 1990:s. Sweden's economy has done remarkably well - having amongst the highest growth rates in Europe, and beeing named the Scandinavian Tiger. Salaries have increased and income tax is lower. Interest are currently extremly low, at the same time as Stockholm continues to grow and production of new dewllings has not kept up with the demand. Over the past few years, prices have increased with 15 - 20% anually.

Many beleive Sweden is experiencing a housing bubble, which could have severe effects on the Swedish economy if or when it bursts. The IMF, OECD, the European Commission, the Swedish Housing Board and many experts and economists are warning for a potential housing bubble in Sweden, and in Stockholm in particular. Sweden escaped falling real estate prices during and after the finacial crisis, and many fear that the country now might be heading the same way as many other cuntried did - with a gousing bubble that bursts.

Several proposals have been discussed on how to curb the constant increase of housing prices. One has been to introduce mandatory re-payments of mortgages with a certain percentage per year. For the second time, the Appeals Court today rejected those guide lines proposed by the government to be set up by Sweden's Finance Inspection, saying that such rules needs to be set by law. The Association or real estate brokers warn the uncertainty is neither good for the market as a whole, or for individual buyers and sellers of real estate.

Before the first proposal of mandatory re-payment of mortgages fell, the housing market in Stockholm experienced a boom, as buyers wanted to get mortgages without the new repayment rules.

Another debated proposal has been the tax deduction of interest payments, as it subsidies loans and stimulates inflated prices of properties. Neither the two major political parties have dared to support such a change, as it might be quite unpopular among the voters. None of the major players such as pariament, the gvernment, the Riksbank or the Finacial Insection has acted against the rapidly increasing prices, despite most of them admits the risks.

The Swedish Housing Board today proposed scrapping the subsidies over a period of 3-5 years, and arguing that with the very low interests rates, it would not make a big difference in cost. A loan which today has 1,5% interest rate, would after the subsidies are taken off, pay 2% That's still a very low rate. Boverket's expert Bengt Hansson belives the housing prices rather will even out, than fall drastically.

The Riksbank and the Debt Office, which manages Sweden's debt, warns that a too quick reduction could cause a negative growth of 3 % and more than 100 000 jobs could get lost. Last time Sweden decreased the deduction of interest rates, from 50% to 30%, in the early 1990:s, prices fell drastically. But it also coincided with the real estate bubble bursting and Sweden faling into a major recession. That decision enforced the negative spiral, and risks are that the same would happend again.

The latest indicator from SEB, one of Sweden's leading banks, show tha consumer condidence in housing prices has decreased over the past month. Still 74% of the respondents beleive in increased prices in the coming year, which is 6 percentage points lower than previous month.

Stockholm and it's suburbs have stepped up it's city planning processes and are now planning to build record many new apartments and houses, to meet the demand and decrease the housing shortage in the region.